Decius - 9:16 am on Jun 23, 2011 (gmt 0)
I advertise for not necessarily a very competitive keyword, but the few competitors there are bid quite high because the return is equally high.
There is one main competitor who has, from the start, been a dirty sort of guy that really tries to use black hat and has independently been found to click on competitors ads religiously.
Anyways, so I ran my campaign as a test a few weeks ago because I had them disabled. In about ten days I had spent approximately $500. By the end of the week, it looked like this competitor had seen my ads and immediately copied my exact ad text and then suddenly my daily cost went from something like 30-40 dollars a day to over one hundred.
So I disable my ads and contact Google.
A week later they send me an email explaining how they found some "invalid clicks" that were not caught and credited me like $35.
Okay, so I'm rejuvinated and also think that maybe they've tweaked their invalid click thing for my account, since they have that sprayed all over their site (constantly tweaking, etc).
So I turn it on yesterday - $50. Not bad. No conversions, but not bad.
Today - between the hours of 3 AM and 4 AM my cost jumps up over $20. So I go in and look.
Someone clicked on my $4/click ads 6 times in the span of ten minutes, and Adwords charged me for every one of them. The IPs changed minorly with each one and all were suspect (static.reverse.softlayer.com, host.degaa.net, host2.degaa.net, reverse.ezzi.net etc).
Now, I'm aware that it's possible Google will subtract some of them as invalid clicks, but when we're talking about a 100% increase in ad costs because their system is so badly flawed that competitors can have a field day with your campaigns, it's time to move on.
There are a few reasons I am posting this, none of which have anything to do with hoping Google does anything about it:
1) To me, this is an extension of the beginning of the end for Google, as what they offer simply does not out-pace the BH competitors, and WH webmasters are the only ones that lose (for invalid clicks, the competitor gains and even Adwords gets paid).
2) I encourage Adwords advertisers to be aware that no matter how much Google tries to spin that their click fraud technology is good, my impression is it catches maybe, maybe 25% of the invalid clicks. If you still remain profitable, great. Pray you don't get a nasty competitor(s).
3) To illustrate that realistically, a white hat website that follows all the rules cannot truly succeed with Google in certain situations. Your quality score is affected by your normal status in the search engine, which directly affects your cost. That means you will always pay more per click than an established competitor, and if they choose to bleed you every time you try to compete, Google will not be able to protect you.
I think I had a really wrong impression of Adwords - they spin so much press about their click fraud technology that I really believed it was only a minor problem, but if your competitor can double your ad cost, it is a major problem.
I think since this is Google's main source of revenue, they are silently hiding the fact that this is a major problem, and hoping that advertisers at large do not catch wind of it, and spinning press to minimize the effect of reports such as this one.
Needless to say, I am completely disabling my Adwords ads as the stress of worrying about $150 ad days due to missclicks would surely drive a person mad, especially when they know exactly who is getting away with it.